In Alanen v. Elliott, 2019 ABCA 290, Madam Justice Elizabeth Hughes reiterated that the Court of Appeal had no jurisdiction to grant permission to appeal an arbitration award “outright”, its jurisdiction limited to appeals of Court of Queen’s Bench decisions under sections 44, 45 and 47 of Alberta’s Arbitration Act, RSA 2000, c A-43. By declining to deal with the initial appeal from an interim costs award, the chambers judge had issued no decision subject to the Court of Appeal’s jurisdiction under that legislation. The reasons also illustrate the role of interim costs to ensure that arbitration process moves forward while treating parties equally and fairly and giving parties opportunity to present their case and respond to the other party’s.
In the fall of 2017, the parties entered into an arbitration agreement in accordance with Alberta’s Arbitration Act for to resolve certain issues stemming from the dissolution of their marriage. By May 2019, the arbitrator had heard 17 applications.
On November 21, 2018, a six (6) day hearing was scheduled to start April 10, 2019. The hearing would deal with financial issues that required each party to present expert evidence for business valuation and income calculation. Due to document disclosures issue arsing by mid-March 2019, Dr. A. wrote to request an adjournment. A hearing on the adjournment application was held on March 25, 2019 and the arbitrator issued her decision on March 26, 2019.
Referring to section 19 of the Arbitration Act and the requirement to treat the parties equally and fairly and the opportunity to present its case and respond to the other party’s case, the arbitrator granted the adjournment subject to three (3) conditions:
(i) the hearing had to be rescheduled by April 2, 2019 and completed by no later than September 26, 2019;
(ii) Dr. A. was to pay Dr. E. $25,000 in costs for the adjournment by April 2 at 5:00 p.m.; and,
(iii) Dr. A. was required to pay the arbitrator’s non-refundable deposit costs for the six (6) days scheduled in April 2019. If the conditions were not met, the hearing was to proceed as scheduled on April 10, 2019.
Dr. A. immediately requested that the arbitrator set aside the decision. The arbitrator responded March 27, 2019 that the “award” would stand “as is”. Additional reasons were later given and appear at para. 13.
(Note: the reasons refer to the arbitrator’s work as both a “decision” and an “award”. The present note reproduces the use of either when citing the statements associated with the procedural step noted).
Dr. A. applied to the Court of Queen’s Bench set aside an interim award of costs and also sought a stay of the award. The chambers judge declined to grant a stay and declined to set aside the costs award. He stated that there was an insufficient evidentiary record before him to understand the basis for it but invited Dr. A. to return with more complete evidence later.
Dr. A. filed two (2) applications to the Court of Appeal. First, he applied for permission to appeal the chambers judge’s decision to not set aside the interim arbitration award. Second, he applied for permission to appeal the arbitrator’s interim award directly to the Court of Appeal.
Both parties agreed that Dr. A. must satisfy the leave requirements under section 48 of the Arbitration Act. Dr. E. submits that Dr. A. must also satisfy the leave requirements under section Rule 14.5(1)(e) of the Alberta Rules of Court, Alta Reg 124/2010 (“Rules”) since this is an appeal of “a decision as to costs only”.
Hughes J.A. held that Dr. A.’s application failed under both rules. She considered first (i)the application for permission to appeal the Court of Queen’s Bench decision under both the Arbitration Act and the Rules and then (ii) permission to appeal the arbitration award “outright”.
(i) permission to appeal the Court of Queen’s Bench decision
Hughes J.A. considered this application
(i)(a) Section 44 of the Arbitration Act
Section 48 allows an appeal to the Court of Appeal from a Court of Queen’s Bench decision under section 44 but only upon permission. Four (4) factors are considered:
1. Is the question reasonably arguable?
2. Is deciding the question likely to affect the result of the litigation?
3. Is the answer likely to be of interest to others, or likely to influence later suits?
4. Is there any independent reason not to re-litigate the question, or to limit the scope of the appeal?
Hughes J.A. dealt with each in turn at paras 20-31 of her reasons.
Factor 1 – Hughes J.A. determined that Dr. A.’s sole ground of appeal was that it was an error of law to deny his application on the basis of there being no evidentiary record on which such order could be based. Hughes J.A. revisited the exchange between counsel and the chambers judge, determining that the issue was not the absence of a transcript of the arbitration hearing but insufficient facts. The chambers judge was open to either an agreement between counsel on the facts of the hearing and Hughes J.A. suggested the option of filing affidavit material to present the record.
The chambers judge had invited Dr. A. to return with better evidence, an invitation which Dr. A. had yet to act upon. As a result, Hughes J.A. concluded that the application was “premature”.
Factor 2 – Dr. A. argued that, henceforth, he would now have to engage the costs of a stenographer in order to have a record made. Dr. E. countered, submitting that Dr. A. could provide affidavit evidence or even testimony and that the chambers judge had invited Dr. A. to re-apply with better evidence. To resolve factor 2, Hughes J.A. determined that the issue was limited to costs and therefore a decision on appeal “would make no difference in this ongoing litigation”.
Factor 3 – Dr. A. argued that the chambers judge’s decision “now requires all conversations be recorded and that this is of interest to other parties engaged in arbitration”. Referring to her reasons “above” (in factors 1 and 2), Hughes J.A. held “this argument has no merit”.
Factor 4 – Dr. A. argued that there was “no independent reason not to re-litigate this question and no reason to limit the scope of the appeal”. Dr. E. responded by noting that this was the 4th adjournment occasioned by Dr. A. in which Dr. E. “had to incur throwaway costs” and that earlier costs award have “obviously not deterred his conduct”. Citing Kawchuk v. Kovacs, para. 38, Hughes J.A. noted the court’s policy regarding involvement in arbitration.
“This policy militates against setting aside an arbitration award except in the most compelling of cases. In light of the history of this arbitration, granting permission to appeal will not encourage dispute resolution. Further, there are no compelling reasons to grant permission to appeal in this case”
(i)(b) Rule 14.5(1)(e)
Bun v. Seng, 2015 ABCA 165 para. 4 provides that permission to appeal a costs award should be granted “sparingly” and the applicant must meet “a high threshold”. Ben v. Seng applied the test for permission to appeal set out in Jackson v. Canadian National Railway Company, 2015 ABCA 89, para. 10, a decision which issued under the former appellate Rules. The test remained relevant:
1. the applicant must identify a good, arguable case having enough merit to warrant scrutiny by the court;
2. the issues must be important, both to the parties and in general;
3. the appeal must have practical utility; and
4. the court should consider the effect of delay in proceedings caused by the appeal.
Hughes J.A. held that Dr. A. failed to meet the test for permission to appeal the costs award. The award caused him no financial hardship and therefore he could not meet the 2nd and 3rd criteria. Despite the opportunity to return to the Queen’s Bench on the matter, Dr. A. did not. As well, a costs decision is a discretionary one and if afforded deference on review.
(ii) permission to appeal the arbitration award
Hughes J.A. doubted that the Court of Appeal had jurisdiction to grant permission to appeal an award “outright”. Relying on Anand v. Anand, 2018 ABCA 259 para. 10, Hughes J.A. held that only appeals of Court of Queen’s Bench decisions pursuant to sections 44, 45 and 47 of the Arbitration Act may be appealed to the Court of Appeal. Because the judge declined to deal with the appeal, those sections were not triggered and Hughes J.A. expressly endorsed the reasoning in Anand v. Ananda that she had no jurisdiction to hear an appeal of the award.
urbitral note – The reasons recognize the role of costs awards as part of the solutions available in arbitration to ensure that the process moves forward. The reasons further recognize that recording all hearings is not the sole manner in which evidence of the arbitral process can or should be brought before the courts. Agreement by counsel, affidavit evidence and viva voce testimony can also serve to provide the necessary facts on which the courts can take decisions within their jurisdiction.
For an earlier Arbitration Matters note on Anand v. Anand relied on by Hughes J.A., see “Alberta Court of Appeal blocks attempts to create shortcuts on challenges to arbitration awards”).